Seoul stocks slump, snapping 3-day winning streak; Korean won falls to lowest level against U.S. dollar in 13 years

SEOUL– South Korean stocks tumbled Monday as investors grappled with renewed concerns over the U.S. central bank’s aggressive monetary tightening. The Korean won dropped to its lowest level against the U.S. dollar in 13 years.

The Korea Composite Stock Price Index (KOSPI) dropped 54.14 points, or 2.18 percent, to close at 2,426.89, ending its three-day rise.

Trading volume was moderate at 441.63 million shares worth 7.79 trillion won (US$5.77 billion), with losers far outnumbering winners 822 to 86.

Institutions and foreign investors unloaded a net 616.4 billion won worth of shares, while retail investors picked up a net 600.20 billion won.

“The stronger-than-expected remarks by Powell sent shockwaves throughout the market,” said Kwak Byung-yeol, an analyst with Leading Investment & Securities Co.

“But the market will unlikely go deeper into correction, and investors will be closely watching economic data on oil prices, employment and inflation,” he said.

Last Friday, Federal Reserve Chair Jerome Powell reiterated the U.S. central bank’s hawkish stance in monetary tightening to bring four-decade high inflation under control at the annual Jackson Hole meeting.

Higher interest rates, which he said will cause “some pain” to the economy, will likely continue “for some time,” Powell said.

In Seoul, the market went down markedly across the board on Monday.

Market bellwether Samsung Electronics lost 2.33 percent to end at 58,600 won, and No. 2 chipmaker SK hynix shed 2.73 percent to 92,500 won. Key battery maker LG Energy Solution went down 1.29 percent to 459,500 won.

Internet portal giant Naver declined 3.31 percent to 234,000 won, and platform operator Kakao plummeted 5 percent to 72,200 won.

The local currency ended at 1,350.40 won against the U.S. dollar, down 19.1 won from the previous session’s close and closing below the 1,350 level for the first time since April 29, 2009, when the Korean currency hit 1,357.5 won.

Bond prices, which move inversely to yields, closed down. The yield on three-year Treasurys rose 12.8 basis points to 3.653 percent, and the return on the benchmark five-year government bond gained 14.6 basis points to 3.761 percent.

Source: Yonhap News Agency

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